In a game of chicken between stores and shoppers over prices, stores appear to be blinking first, CNN reports. Several retailers, including Walmart, Ikea, H&M and Michaels, have cut prices in an effort to pull consumers into stores and spend money on such things as new clothes, decorative items for the home and arts and crafts or hobby kits, according to the network.
Shoppers have pulled back for a year now as costs have risen 20% to 30% higher than they were three years ago and as incomes failed to keep up, Sarah Wyeth, Managing Director, Retail and Consumer with S&P Global Ratings, told CNN.
This is making consumers across income levels look for deals.
“The ‘budget conscious consumer’ is no longer just low- or middle-income earners. By far the starkest decrease in intent to spend is coming from the higher-income groups, and those that were previously the most immune to an economic downturn are now tightening their belts,” said Chad Lusk, managing director in global consultancy firm Alvarez & Marshal’s consumer and retail group. “Retailers should be thinking about targeted deals on higher-priced discretionary merchandise, too, to increase buying frequency.”
The result has been a sense of anxiety by the industry. “Retailers have been nervous for quite a while,” Wyeth said. “There’s just less dollars for consumers to spend.”
The challenge for retailers now is to shake consumers out of that frugal mindset.
Advertisement
Click here for more from the CNN report.
Closing With Confidence: How Bailey's Fine Jewelry Achieved Outstanding Results With Wilkerson
When Trey Bailey, President and CEO of Bailey's Fine Jewelry, decided to close the Crabtree location in Raleigh, North Carolina after 15 years, he knew the decision needed to be handled with intention and professionalism. The goal was clear: exit the location while maintaining financial strength and honoring the store's legacy.
Having worked with Wilkerson successfully in the past, Bailey understood the value of their comprehensive approach. "They understood both the emotional and financial sides of the store closing sale," Trey explains. "Their reputation for professionalism, results and care made it a very easy decision."
The results exceeded expectations. Wilkerson helped Bailey's sell through significant inventory while maintaining the dignity of the closing process. "They don't just run a sale, they help close a chapter in the best way possible," Bailey says, strongly recommending Wilkerson to any jeweler facing a similar transition.
